Opinion Recap: Cuomo v. The Clearing House Assâ€™n, L.L.C.

Posted Tue, June 30th, 2009 6:12 pm by Amy Howe

Please note that Howe & Russell filed an amicus brief in this case on behalf of the Lawyers' Committee for Civil Rights Under Law, National Fair Housing Alliance, and NAACP Legal Defense and Educational Fund, Inc. in support of the petitioner.

In 2005, the New York Attorney General began an investigation into the lending practices of several national banks that he believed, based on publicly available data, had issued a disproportionate number of high-interest loans to minority borrowers.The Office of the Comptroller of the Currency (OCC) and a banking trade group went to federal court to enjoin the Attorney General's investigation, arguing that a 2004 regulation promulgated by the OCC prohibited states from enforcing their own fair lending laws.Both the district court and the Second Circuit agreed with the OCC, and the New York Attorney General sought Supreme Court review.

Yesterday the Supreme Court, by a vote of five to four, largely rejected the OCC's argument.At issue in the case is a provision of the National Bank Act which "“ as relevant here "“ provides that national banks shall not "be subject to any visitorial powers except as authorized by Federal law [or] vested in the courts of justice."In 2004, the OCC adopted a regulation to implement the National Bank Act that prohibited states from "exercis[ing] visitorial powers with respect to national banks, such as conducting examinations, inspecting or requiring the production of books or records of national banks, or prosecuting enforcement actions."However, the regulation did provide that "production of a bank's records . . . may be required under normal judicial procedures."

Writing for an unusual line-up that included Justices Stevens, Souter, Ginsburg, and Breyer, Justice Scalia acknowledged "some ambiguity" in the meaning of "visitorial powers."But such uncertainty, he continued, "does not expand Chevron deference to cover virtually any interpretation of the National Bank Act."Surveying the Supreme Court's jurisprudence, the Court deemed it clear that a state's ""visitorial powers' and "its power to enforce the law are two different things," and the National Bank Act "pre-empts only the former."The Court also questioned the consequences that would arise from the OCC's interpretation of the NBA:although some state laws regulating banks would remain in effect, states would be precluded from enforcing those laws.By contrast, the Court noted, allowing state attorneys general to enforce state laws in court (but not exercise visitorial powers) "would preserve a regime of exclusive administrative oversight by the Comptroller while honoring in fact rather than merely in theory Congress's decision not to pre-empt substantive state law."Moreover, the Court notes, judicial law-enforcement proceedings are subject to greater constraints and thus will limit the likelihood of "fishing expeditions" by state officials.

Having concluded that the OCC's regulation was not consistent with the statute insofar as it precluded states from bringing suit to enforce state laws against national banks, the Court then turned to the OCC's interpretation of its regulation, which purported to limit the scope of the regulation by conceding that states could still regulate national banks in some respects, such as "contracts, debt collection, acquisition and transfer of property, and taxation, zoning, criminal, and tort law."The exceptions that the OCC would carve out, the Court explained, "cannot be reconciled with the regulation's almost categorical prohibition in 12 CFR §7.4000(a)(1) of "prosecuting enforcement actions.'"

Returning to the facts of the case before it, the Court concluded that because the Attorney General had requested information in lieu of a subpoena "“ rather than, for example, filing a lawsuit or obtaining a search warrant "“ it would affirm the decision below "as applied to the threatened issuance of executive subpoenas," but it vacated the decision insofar as it barred judicial law-enforcement actions.

Justice Thomas wrote a decision, joined by the Chief Justice and Justices Kennedy and Alito, concurring in part and dissenting in part.He would have held that (1) the phrase "visitorial powers" is ambiguous; (2) the OCC's interpretation of that phrase "fits comfortably within this broad dictionary definition of visitation"; and (3) the Attorney General's request for information to enforce state fair lending laws constituted an effort to exercise such powers.In the dissenters' view, the Attorney General's "federalism-based objections to Chevron deference ultimately turn on a single proposition:It is doubtful that Congress pre-empted state enforcement of state laws but not the underlying state laws themselves."Even if that were true, however, the dissenters counter that "it is not this Court's task to decide whether the statutory scheme established by Congress is unusual or even "[b]izarre.' The Court must decide only whether the construction adopted by the agency is unambiguously foreclosed by the statute's text."

As a result of the Court's decision, state attorneys general throughout the country may now seek to enforce their states' fair lending laws against national banks, creating a scenario in which banks could potentially be subject to conflicting laws in different states.However, while the Court held that states could enforce their laws by bringing lawsuits, states may "“ without the kind of "visitorial powers" that could provide them with information regarding banking practices "“ face some obstacles in obtaining the information that they need to bring such suits.

Merits Case Pages and Archives

On Monday, the justices met for their September 25 conference. The justices removed Trump v. International Refugee Assistance Project and Trump v. Hawaii from the court's October sitting. We expect orders from this conference on Thursday. The October 2017 term will begin on Monday, October 2. The calendar for the October sitting is available on the court's website.

Major Cases

Trump v. International Refugee Assistance Project(1) Whether respondents’ challenge to the temporary suspension of entry of aliens abroad under Section 2(c) of Executive Order No. 13,780 is justiciable; (2) whether Section 2(c)’s temporary suspension of entry violates the Establishment Clause; (3) whether the global injunction, which rests on alleged injury to a single individual plaintiff, is impermissibly overbroad; and (4) whether the challenges to Section 2(c) became moot on June 14, 2017.

Gill v. Whitford(1) Whether the district court violated Vieth v. Jubelirer when it held that it had the authority to entertain a statewide challenge to Wisconsin’s redistricting plan, instead of requiring a district-by-district analysis; (2) whether the district court violated Vieth when it held that Wisconsin’s redistricting plan was an impermissible partisan gerrymander, even though it was undisputed that the plan complies with traditional redistricting principles; (3) whether the district court violated Vieth by adopting a watered-down version of the partisan-gerrymandering test employed by the plurality in Davis v. Bandemer; (4) whether the defendants are entitled, at a minimum, to present additional evidence showing that they would have prevailed under the district court’s test, which the court announced only after the record had closed; and (5) whether partisan-gerrymandering claims are justiciable.

Carpenter v. United StatesWhether the warrantless seizure and search of historical cellphone records revealing the location and movements of a cellphone user over the course of 127 days is permitted by the Fourth Amendment.

Conference of September 25, 2017

Collins v. Virginia Whether the Fourth Amendment's automobile exception permits a police officer, uninvited and without a warrant, to enter private property, approach a house and search a vehicle parked a few feet from the house.

Butka v. Sessions Whether the U.S. Court of Appeals for the 11th Circuit erred in this case by holding that it had no jurisdiction to review the denial of a motion to reopen by the Board of Immigration Appeals, where the review sought was limited to assessing the legal framework upon which the sua sponte request was made.

National Institute of Family and Life Advocates v. Becerra Whether the free speech clause or the free exercise clause of the First Amendment prohibits California from compelling licensed pro-life centers to post information on how to obtain a state-funded abortion and from compelling unlicensed pro-life centers to disseminate a disclaimer to clients on site and in any print and digital advertising.

On August 16, Judge Jon Newman of the U.S. Court of Appeals for the 2nd Circuit gave a lecture, “The Supreme Court — Then and Now,” in which he compared the Supreme Court today to the court in October Term 1957, when Newman served as a law clerk to Chief Justice Earl Warren.